Polkadot (CRYPTO: DOT) Rose 76% From September to December Before Falling Back 21% From That Peak

Cryptocurrencies have been volatile lately.

The price of cryptocurrency giant Bitcoin (CRYPTO: BTC) fell on Sunday evening, continuing a recent slide that has seen the world’s leading cryptocurrency lose a fifth of its value since mid-December.

Bitcoin was trading at $47,333 on the Bitstamp exchange, down 2.3% over the past 24 hours and now 60% over the past year. The cryptocurrency had risen to as high as $54,244 on Thursday.

The recent slide in Bitcoin’s price comes as the U.S. Federal Reserve continues to hike interest rates in order to tame inflation. The Fed’s actions have led to a souring in risk appetite among investors, who are now exiting their holdings of assets like Bitcoin and pivoting towards less risky investments like government bonds.

The cryptocurrency market is also keeping a close eye on the progress of a bill in the U.S. Congress that could regulate the industry. The bill, which is being written by the House Financial Services Committee chair, Rep. Maxine Waters, aims to create a regulatory framework for cryptocurrencies, covering areas such as money laundering, consumer protection, and the role of the Securities and Exchange Commission.

The bill is still in the early stages of development, and it is unclear what form it will ultimately take. However, its creation comes amid growing pressure on Congress to regulate the cryptocurrency industry.

The industry has faced increasing scrutiny in recent years, as the price of Bitcoin and other cryptocurrencies has soared to new highs. This price action has attracted the attention of a broad range of investors, including retail traders and hedge funds, heightening the risk of illicit activity.

Earlier this year, the price of Bitcoin rose to as high as $73,000 during the final days of 2024, a level not seen since the apex cryptocurrency was first introduced in 2009. The gains came after the Trump administration began accepting contributions in Bitcoin for his 2024 presidential campaign.

The cryptocurrency’s price has since fallen sharply, sliding to as low as $38,000 in March. The decline comes as the Fed continues to raise interest rates, leading to a deterioration in investor risk appetite.